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Why would a bank be interested in a firm's profit and loss account?
Wiki User
∙ 9y ago
Stakeholders, anyone who has an intrest in a business, are intrested in a companies profit and loss accounts for different reasons. Here are some examples:
Shareholder: To see how well the company has been performing and how therefore good their dividend payout will be
Government: Businesses performing well in country allows more money to be taxed from them and may attract other businesses from abroad
Staff: A financially sound business may be able to pay higher wages..
Mainly the look at them to see how much money they can extract out of the business.
Wiki User
∙ 13y ago
Wiki User
∙ 9y agoThe Firm was the customer of the bank and avail so many Loans & Other benefits for running their Unit Successfully. For availing those Services from Banks first we have to avail the CMA Reports of the Unit. With out this statements the bank can't assume the position of the Unit. So it is must to the unit to provide CMA to the Bank. By that only they can able to find the necessary reports and decisions whether the unit can repay the loan in time.
Wiki User
∙ 9y agoThe shareholders hold shares in the firm so they want to ensure that the firm is making a profit. With the profit and loss account, the shareholders can see whether the firm is making a profit or a loss. If the account indicates that the firm is making less profit over time, the shareholders may choose to sell their shares or pressure the managers to come up with strategies to increase the firm's profitability.
share holders are interested in profit and loss account because they are also the owners of company and they invest in business to earn profit.
Wiki User
∙ 9y agoWhen a bank offers a firm a loan, it wants to make sure that the firm is able to repay the loan. The profit and loss account is based on historical figures, so the bank can use it to predict the firm's level of profit in the future and whether it can repay its loan or not. This minimizes the risk of the bank not receiving its repayment due to the firm failing to earn a profit.
Wiki User
∙ 9y agoThe shareholders hold shares in the firm so they want to ensure that the firm is making a profit. With the profit and loss account, the shareholders can see whether the firm is making a profit or a loss. If the account indicates that the firm is making less profit over time, the shareholders may choose to sell their shares or pressure the managers to come up with strategies to increase the firm's profitability.
Wiki User
∙ 9y agoshare holders are interested in profit and loss account because they are also the owners of company and they invest in business to earn profit.
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Why would stock be expensed in the profit and loss account?
Stock would be expenses to the profit & loss account (P&L) when: * It was used, or * It had no economic value
Under what heading would fixed assets show on a profit-loss account?
They do not reflect in the profit loss account at all.
Explain the process that drives the economic profit to zero in the long run for a perfectly competitive firm?
In perfectly competitive markets, economic profits are zero in the long run because firms are able to enter and exit the market. If firms in a perfectly competitive market are profitable, there would be an incentive for new firms to enter. Supply would increase, causing an increase in quantity and the price to be driven back down to equilibrium: NO PROFIT! If firms in a perfectly competitive market are suffering a loss, some firms would choose to exit the market. Supply would decrease, causing a decrease in quantity and the price to be driven back up to equilibrium: NO PROFIT!
What would you find on a profit and loss account?
In profit and loss account normally list all in the revenues and expenses and profit or loss for any particular fiscal year of company.
Is carriage inwards part of a profit and loss account?
Yes, it would go in Cost of Goods Sold.
What is the definition of an interested party in a 529 fund?
The Interested Party is someone other than the account owner that has the ability to call in and ask specific questions about the account. The interested party also gets duplicate quarterly statements. On a related issue, the Successor Account Owner is the person who will own the account if th eaower dies. If both the owner and successor died at the same time the account would then go the executor of the owner's estate.
Why is cost an important factor in market economies?
the least-cost production method will have to be used. If any other method were used, firms would be sacrificing potential profit. Any firm that fails to employ the least-cost technique will find that other firms can undercut its price.
What happens if revenue expenditure is recorded as a capital expenditure?
If that happens, there will be overstatment of the period's profit as well as overstatement of assets. This will reduce the future profit of business because the original costs of assets will be charged more to the Profit and Loss account in process of depreciation of assets.
How can you account services rendered by a nonprofessional?
I would need more information to answer this question. What is the reporting unit (e.g., a for-profit corporation, a non-profit, a governmental entity). Are the services charged or free of charge?
What is lost depreciation tax shield?
Lost depreciation tax means that loss of that tax amount which could be saved if there would be depreciation expenses in profit and loss account which will reduce the profit and hence the tax as well.
Can anyone check your credit report?
Pretty much anyone, if they have a few connections. They would have to go through a company that had an account with one of the credit reporting firms, but it's not hard to find a way -- nor, for that matter, to get an account of your own.
What are the implications of Negative General Reserve in balance sheet of a company?
It would be shown as Debit Balance of Profit & Loss Account on Asset side
